The latest statistics released by the North Texas Real Estate Information System (NTREIS) indicate some positive news for the real estate market in Dallas, Fort Worth and the surrounding areas.

Single-family home sales rose by two percent from September 2007 to September 2008, up to 6,392 last month. Sales volume of single-family properties also rose by once percent to $1.23 billion, while the average price indicated no percentage change at $193,156.

The relative price stability is positive news, particularly compared to the home price crashes in other markets across the country.

The number of listings currently for sale has additional good news for the local area. With 41,604 single-family homes currently for sale, supply represents a 15 percent decrease over the number of homes available for sale during September 2007. That tightening of supply is particularly good timing, as an overabundance of supply, without a surge in demand, could cause softening of property values. Conversely, the tightening of supply is likely to aid in the preservation, and growth, of property values.

Data source: North Texas Real Estate Information System (NTREIS)

Some leading economic analysts estimate that more than 10 percent of all homeowners in the United States have negative equity in their homes and predict that percentage will increase as prices continue to fall. The major areas affected by lower home prices are six states: California, Florida, Nevada, Arizona, Ohio and Michigan. Through the first half 2008, these states accounted for 43 percent of all foreclosures in the country according to RealtyTrac, Inc.

Nationally, the number of foreclosures continues to climb, but may begin to stabilize in the second half of 2008 and into 2009.

However, no significant decline in overall foreclosures should be expected until late 2009 or early 2010 as the number of adjustable rate mortgage (ARM) resets for both prime and subprime mortgages will not significantly abate until second quarter 2009.

Texas foreclosures have remained fairly stable, compared with a national increase of 61 percent to 1.4 million. Based on Notice of Trustee Sales and Notice of Foreclosure Sales, Texas properties posted for foreclosure during the first half of 2008 totaled 42,705, down 17.7 percent from the same period in 2007. Foreclosure postings were up 27.3 percent to 462,418 nationally.

The Mortgage Bankers Association (MBA) National Delinquency Survey data reveal that adjustable rate mortgages account for the majority of foreclosures. Prime and subprime ARM mortgages represent approximately 20 percent of all mortgages outstanding, and 60 percent of all foreclosures started during first quarter 2008.

Source: Tierra Grande, Real Estate Center at Texas A&M University

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Deductions for moving expenses can ease the tax burden, but taxpayers must meet a "start of work" test, two distance tests and an employment time test to be eligible.

A different set of rules applies to members of the armed services and retirees. For everyone else, here are the basic three tests:

Start of Work Test: The taxpayer must begin working in the new location within one year of the move, but it is not necessary that employment be obtained before the move. Thus, if the move occurred on Sept. 3, 2008, the taxpayer must start the new job by Sept. 3, 2009.

Certain exceptions allow the one-year period to be extended. For example, if the taxpayer delayed moving to the new location so that a child could complete the school year, the one-year period would be waived.

Distance Test Number One: The distance from the new home to the new job location must be less than the distance from the previous home to the new job location. This rule is waived if the taxpayer spends less time or money traveling from the new home to the new job. For example, if the new home location enables the taxpayer to carpool (and carpooling was unavailable previously), the commuting costs may be less even though the distance to work has increased. This test is also waived if the taxpayer is required to live at a new location as a condition of employment.

Distance Test Number Two: A second distance test is applied to make certain the taxpayer's new job location requires relocation. This test requires the taxpayer's travel to the new job without the move to increase by at least 50 miles. Specifically, the test is met if the distance from the old residence to the new job is at least 50 miles greater than the distance from the old residence to the old job. Note that the location of the new residence is not a factor.

Time Test: The taxpayer-employee must be employed on a full-time basis at the new workplace for 39 weeks during the first 12 months following the move. For self-employed individuals, the requirement is 39 weeks during the first 12 months and for a total of 78 weeks during the first 24 months after they arrive in the general area of the new employment. Either the taxpayer or the taxpayer's spouse can satisfy one of the two time tests, but weeks worked by one spouse cannot be added to weeks worked by the other spouse.

What to Deduct: All moving expenses that are deductible are "above-the-line deductions," meaning they are deductible regardless of whether the taxpayer itemizes their deductions. The cost of one trip from the old residence to the new residence per vehicle is allowed.

Actual expenses for gas and oil or a standard mileage rate must be used. For the second half of 2008, the standard mileage rate reflects the higher costs of oil and gas. The rate is 19 cents per mile through June, and 27 cents per mile through December.

The benefits of deducting moving expenses can be sizable, but the rules and calculations can be complicated. For best results, consult with a tax accountant or an attorney.

Source: Tierra Grande, Real Estate Center at Texas A&M University

Even with all of the wonderful benefits of homeownership, there are some stresses -- among the most significant are worries about expensive repairs and replacements of big ticket items like air-conditioning systems and large appliances. For this reason, it's a good idea to get a residential service contract (also called a home warranty plan) when you buy a new home, or even later on, as the case may be.

The general idea behind a residential service contract is this: If a covered item malfunctions, the homeowner calls the service contract company, which contacts a contracted local service provider. The local provider makes an appointment with the homeowner to evaluate the failed equipment. If the item can be fixed, it will be. If it cannot be repaired, the policy pays for a replacement and installation.

Residential service contracts offer different levels of protection. Some provide comprehensive protection, even including termite damage -- while others are more limited — for instance, they may not cover the AC unit. Special coverage will likely be needed if you've got a swimming pool or a hot tub in your new place. Choose your policy according to your needs and make sure you know the level of coverage you're paying for.

Keep in mind that you must renew your residential service contract if you want to continue coverage after the initial term. You may decide that it's better to have the protection and not need it than to need it and not have it. Ask your agent for a referral to a quality residential service contract company.

Source: Texas Association of Realtors

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